AN INVESTIGATION OF HOTEL BUSINESS IN THAILAND DURING THE COVID – 19 PERIOD

Abstract

This research aimed at (1) measuring the efficiency of the top - 50 Hotel businesses which have the highest amount of authorized capital in Thailand (2) investigating the change of the hotel businesses’ efficiency during the period of before and after the emergence of Covid – 19 in Thailand (2019 – 2020), and (3) comparing the difference of efficiency level between DEA and SFA model. The author employed financial statement data of hotel business under the TSIC 55101 code from Corpus database by assigning revenue from sales or from rendering services as the output variable, while the other 4 input variables including cost of sales or cost of rendering services, selling expenses, administration expenses, and the value of land, buildings, and equipment. The author applied output – oriented CCR – DEA model, BCC – DEA model and Malmquist index to compute the efficiency score and compare them to those computed from SFA model with Cobb Douglas and Translog production function.           The results signified that both DEA and SFA model potentially indicated the diminishing of production efficiency of hotel businesses after the emergence of the COVID – 19 situations. However, the decomposition of Malmquist index showed that the fall of hotel businesses’ efficiency was not a result of the technical efficiency change, but it was a result of the technological change (frontier shift), while the SFA model indicated the existence of technical inefficiency both in the cases of SFA – Cobb Douglas and SFA – Translog models. However, the test result of LR statistic found that SFA – Translog model was more appropriate for estimating efficiency score than SFA – Cobb Douglas model.